Serdar Sayan

Demographic shock transmission from large to small countries: An overlapping generations CGE analysis

Abstract International commodity and capital flows provide channels for the transmission of the effects of demographic changes in large countries onto small open economies by altering the prices and interest rates facing them. This implies that even small countries with relatively young populations are potentially vulnerable to the effects of population aging in large industrial economies. To address this issue, which has largely been overlooked in previous literature, this paper considers the case of European Union and Turkey and shows, within an overlapping generations general equilibrium framework, that spillovers of the demographic shock in Europe would intensify the changes that Turkey would experience during its own demographic transition.

Use of Time-Frequency Representations in the Analysis of Stock Market Data

The analysis of economic/financial time series in the frequency domain is a relatively underexplored area of the literature, particularly when the statistical properties of a time series are time-variant (evolutionary). In this case, the spectral content of the series varies as time progresses, rendering the conventional Fourier theory inadequate in describing the cyclical characteristics of the series fully. The joint Time-Frequency Representation (TFR) techniques overcome this problem, as they are capable of analyzing a given (continuous or discrete) function of time in time and frequency domains simultaneously.

Parametric pension reform with higher retirement ages: A computational investigation of alternatives for a pay-as-you-go-based pension system

Abstract This paper discusses parametric reform options to control losses generated by a publicly managed pay-as-you-go (PAYG) pension system under alternative deficit reduction (reform) strategies involving changes in contribution and replacement rates and statutory retirement ages. Two different problems corresponding to different pension reform strategies are considered using computational techniques. The techniques are illustrated through exercises employing data for the financially troubled pension system in Turkey.

Identification of parametric policy options for rehabilitating a pay-as-you-go based pension system: an optimization analysis for Turkey

Publicly managed pension systems operating on the basis of pay-as-you-go (PAYG) schemes face financial difficulties worldwide. The expenditure-revenue balances of such a system are determined jointly by the selected configuration of system parameters, and interrelated developments in the labour market and demographic structure. In a country where pension coverage is compulsory, these developments occur completely beyond the control of pension system administrators implying that any imbalances that may arise over time can be corrected only by adjusting the existing configuration of contribution and replacement rates, and minimum retirement ages. It can be shown, however, that there are infinitely many configurations of these system parameters that could be used to maintain a selected intertemporal balance between the amounts of contributions collected from workers and pensions paid to the retirees. This paper describes an algorithm developed to identify all possible configurations compatible with this goal and illustrates its use with reference to the pension reform debate in Turkey, a country whose PAYG-based pension system already faces a severe financial crisis despite a relatively young workforce/population. The results indicate that for contribution and replacement rates to remain around their current values, the minimum retirement age must be increased substantially.

H-O for H2O: Can the Heckscher-Ohlin Framework Explain the Role of Free Trade in Distributing Scarce Water Resources Around the Middle East?

This paper aims to test econometrically the validity of Heckscher–Ohlin (H–O) theory within the context of export patterns of 11 relatively water abundant and relatively water-scarce countries located in the Eastern Mediterranean and Middle East and North Africa (MENA) regions. For this purpose, the paper calculates the revealed comparative advantage (RCA) and net trade indices (NTI) for 13 sectors in each country and estimates the relationship between RCA values and water requirements of production in each sector. The results are then used to test whether parameter values estimated from this exercise can be linked to water endowments of the countries considered. By helping determine whether the countries in the sample act according to their comparative advantages, econometric results from this innovative application of H–O theory yield interesting policy conclusions.

MEASURING THE DEGREE OF BLOCK INTERDEPENDENCE BETWEEN AGRICULTURAL AND NON-AGRICULTURAL SECTORS IN TURKEY

Based on the similarity of productive activities carried out by sectors, national input-output (IO) matrices may be divided into sub-matrices each representing a broader group of sectors called blocks. The strength of linkages among sectors that belong to different blocks would then show the degree of block interdependence. The measurement of this degree is useful in many areas including structural change analysis, evaluation of various support policy alternatives or for deciding whether a general or a partial equilibrium framework should be used to investigate the effects of an exogenous shock to a particular sector or a block. This paper introduces a technique that can be used to gauge the degree of block interdependence based on simulation results from demand and supply-side IO models. The application of the technique is illustrated for the case of interdependence between agricultural and non-agricultural blocks in Turkey which recently signed a Customs Union Agreement with the EU. The results indicate that, although Turkeys Agreement covers trade relations in non-agricultural sectors alone, the agricultural sectors must face indirect effects the magnitude of which depend, to a great extent, on the degree of interdependence between blocks considered here.

Structural change in agriculture and water requirements in Turkey

This paper investigates the effects of the post-1980 structural reforms in Turkey on the strength of inter-industry linkages between agricultural and non-agricultural sectors, and discusses the implications of the changing strength of these linkages for water consumption by the Turkish economy as a whole. For this purpose, we first solve demand- and supply-side input-output models under alternative scenarios concerning the nature of linkages between agricultural and non-agricultural sectors in 1979 and 1990. We then calculate the direct and indirect water requirements of production in 32 sectors and estimate the amount of water embodied in agricultural and manufacturing exports of Turkey.

Trade and Labor Flows Between Countries with Young and Aging Populations

Abstract This paper studies the directions of commodity and labor flows between two countries where the population in one country is relatively younger and grows faster than the other by using results obtained under alternative simulation scenarios within the framework of a dynamic/overlapping-generations general equilibrium model. The differing age profiles are shown to create wage and rental rate differentials under autarky. This causes costs of production and relative prices to differ, providing the grounds for trade. Furthermore, should labor mobility across countries be allowed, wage differentials provide incentives for workers to migrate from the high population growth country to the other.

Serving as a referee for your own paper: A dream come true or…?

Abstract This note first describes the details of an interesting incident of plagiarism where the author of a previously published paper was sent a verbatim copy of that paper for his review for possible publication in another journal. It then offers a few insights into the possible reasons underlying such blatant plagiarism attempts, and provides caveats against them.

Host-Country Economic Policies and Worker Remittances to Developing Countries: The Cases of Turkey and Mexico

This book examines how policies implemented by members of the Organisation for Economic Co-operation and Development (OECD) affect development and poverty in developing and transition economies.